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Council rejects rate normalization

Rankin hamlet opposed to Qulliq Energy Corporation plan to equalize rates across territory
Rankin Inlet’s council continues to oppose a plan by Qulliq Energy Corporation to standardize electricity rates across the territory. Stewart Burnett/NNSL photo

In May, the Hamlet of Rankin Inlet wrote to the Utility Rates Review Council, stating its opposition to Qulliq Energy Corporation’s proposed rate equalization plan.

In June, Rick Hunt, CEO of QEC, responded to Council in a letter.

And on Aug. 22, that letter was shared at the hamlet council meeting.

“I read through it,” said Coun. Justin Merritt. “And it’s a bunch of crap.”

With the change in how QEC calculates rate, the corporation has proposed a realignment of existing community-based rates into territory-wide rates. The plan would roll out a change to rates for a test year in 2022/2023. If approved, it would add up to a 5.1 per cent increase.

Currently, residential customers across the territory pay a base rate subsidized by the Government of Nunavut up to a certain threshold. Beyond that, they pay a per-community rate, which varies depending on the community. QEC is looking to standardize that price across the territory, claiming it would equalize rates with Iqaluit, which are the lowest in the territory.

“QEC’s current rate structure does not reflect the true cost of power in communities,” wrote Hunt in his letter to the Mayor Harry Towtongie.

He went on to say that electricity should be considered an “essential service” and customers should be treated equally.

“Even in Nunavut, other essential services are priced in this manner,” he wrote, referencing the standardized price for heating fuel and gasoline.

“This proposal is not about larger community rate increasing to subsidize smaller community rates whatsoever.”

But Merritt suggested it is better for electricity rates to reflect the true costs in each community.

He compared it to the different price of milk in different places. He said it wouldn’t be fair if the price of mils in Rankin Inlet went up to meet in the middle with the price of milk in a more remote community like Naujaat.

“I think we have to pass this on to our MLAs that this is not acceptable and even meet with our MLAs about it that if this goes through, maybe they’re not our MLAs anymore,” said Merritt. “That’s how strong I feel about it.”

Council passed his motion to write a letter to the town’s MLAs restating the hamlet’s opposition to QEC’s proposal.